Stuart Petroleum (STU)

The microcap oil and gas explorer started the week on an upbeat note when it said oil output would rise 20 per cent to more than 300,000 barrels by 2011 from its mainstay Cooper Basin Asset in South Australia.

The news sent the stock up 6 per cent to 53¢ - its best one-day gain in nearly three months.

If management’s estimates are right, there could be more upside in the wings as it believes the market is only ascribing an enterprise value to 2P (proven and probable) reserves of $US12 a barrel of oil equivalent (boe) when its peer average is $US45 a boe.

Stuart Petroleum
’s management has appointed Gresham Advisory Partners to help it unlock value in its assets. This could include organic growth, asset sales and mergers and acquisitions.

Stuart should also be debt free following the sale of its interests in the offshore Timor Sea Permit, AC/P33, including the Oliver oilfield appraisal and development project, for $US7.5 million ($8 million).

The stock has underperformed over the last 12 months with a 4 per cent loss compared to a 98 per cent gain on the ASX Small Cap Resources Index.